Isuzu Plans to Make South Africa a Truck Manufacturing Hub for Africa

According to a report by Reuters, on August 15, Billy Tom, President and CEO of Isuzu Motors South Africa, stated that the company plans to become a manufacturing hub for commercial vehicles in the African market to help boost production and increase the proportion of locally sourced parts.

Image source: Isuzu

Billy Tom told Reuters that he has communicated with the Japanese headquarters regarding the plan. Billy Tom stated, "We are proposing to the headquarters that instead of producing vehicles in Japan, we should utilize our existing production base in Africa to complete vehicle manufacturing here."

Billy Tom stated that Isuzu has successfully launched a pilot project for local manufacturing of trucks and their bodies in South Africa. However, currently, some truck bodies of the company are still imported from countries and regions such as China and the Middle East.

Isuzu's South African factory currently primarily produces the Isuzu D-MAX pickup trucks, while also assembling medium, heavy, and extra-heavy commercial vehicles, and importing the Isuzu MU-X SUV for distribution to various markets across Africa. At present, the number of trucks exported from this factory to other regions in Africa is very limited, but the pickups have been exported to more than 30 countries across Africa.

Billy Tom said, "Therefore, we have designated West Africa as the starting point for (truck exports), and we will proceed based on the situation. We have always been looking for opportunities to develop our business in Africa. About six years ago, 15% of our business volume came from the African market, and now this proportion has risen to 22% to 23%. Our goal is to increase this figure to 45%."

Billy Tom hopes to take advantage of the African Continental Free Trade Area (AfCFTA). The AfCFTA agreement has been ratified by 49 countries and was officially launched in 2021, but less than half of its member states are actively trading under the zero-tariff framework.

Due to the continuous influx of imported cars, especially those from China, which has posed a substantial threat to South Africa's local automotive industry, the seven major car manufacturers producing vehicles in South Africa—including Volkswagen, Toyota, and Mercedes-Benz—are actively discussing countermeasures in order to safeguard domestic production volumes.

Recently, South African Minister of Trade, Industry and Competition, Parks Tau, pointed out at an automotive parts conference that the South African Automotive Masterplan sets a target of achieving 60% local procurement of automotive parts by 2035, but the current proportion remains stagnant at 39%. The plan also sets a production target: by 2035, South Africa's annual automobile production needs to increase from the current average of 600,000 units to between 1.3 million and 1.5 million units.

Billy Tom admitted, "The threat of deindustrialization does exist and may be intensifying, as South Africa's automobile imports have been continuously increasing."

Currently, about 64% of the vehicles sold in the South African market are imported. Parks Tau previously stated that the Department of Trade, Industry and Competition of South Africa will, through the country's International Trade Administration Commission, investigate the impact of imported vehicles on local production.